Anova Airlines Case

Continental Airlines Memo To: Lawrence Kellner From: Date: Re: The purpose of this memorandum is to address the profitability issues at Continental Airlines and to estimate the costs for 2009 to forecast the future outlook of the company. To address these issues, I used regression analysis to observe what effect the 11% reduction in flying capacity would have on the firm’s future operating costs. I also used the results from the regression analysis to verify the costs that, if reduced, would further comply with the implementation of cost-cutting initiatives and operational efficiencies that the company is striving for. Lastly, I consolidated the data to forecast Continental’s financial outlook for 2009, then provided insight

In terms of major cities, American Airlines holds significant market share of many of the top domestic routes. According to the U.S Department of Transportation Bureau of Transportation Statistics, American Airlines holds 67.43% share of the Dallas/Fort worth Texas market, 67.46% of the Miami Florida market, 16% of the Chicago market, 16.49% of the Los Angeles market and 13.85% of the New York market; these are significant shares as these are cities within the top five domestic routes in the U.S (DOT, 2015a). American Airlines is also a major employer in the aviation industry. As of June 2015, American had 59,905 full time employees and 7,427 part time employees (DOT, 2015b). Although these numbers makes American the fourth largest employer among major carriers, these numbers are significantly lower from their highest levels of 107,311 full and part time employees reached back in August of 2002 (DOT, 2015b). The managerial accounting significance of this fact will be explored in the Activity Based Costing section of this

• Airline’s profitability hinged on the fraction of its flown seats occupied by passengers- load factor

When looking at the elasticity of demand Southwest is extremely impacted by the elasticity of demand. Items such as externalities, unemployment, inflation, and monetary, fiscal, and federal policies affect the elasticity of demand. The elasticity of demand is based solely on current market conditions, the customer’s purpose for travel, and available substitutes. The airline industry is viewed has being unstable because it is based on current market conditions, and the market is always changing.

City of Dallas – Dept. of Aviation (2014) As the research data was collected, especially with the case study comparative analysis’ between the Texas airports, the statistical occurrences began to detail flight/economic improvements, not only at Love Field, but also at Austin, DFW, Houston, and San Antonio. As seen by the data below all the major airports saw an increase in airline ridership, flights and overall operations.

Vol. 9, No. 3, May 2009, pp. 135–139 issn 1532-0545 09 0903 0135 informs ® Additional information, including supplemental material and rights and permission policies, is available at http://ite.pubs.informs.org. I N F O R M S Transactions on Education doi 10.1287/ited.1090.0033ca © 2009 INFORMS Case Article Introductory Integrative Cases on Airline Revenue Management Tuck School of Business, Dartmouth College, Hanover, New Hampshire 03755, robert.shumsky@dartmouth.edu Robert A. Shumsky T his case article summarizes two case series. Each case series includes three subcases and has an associated teaching note. These six short cases introduce many of the concepts that underlie the practice of airline revenue

Competitor Analysis Competitive Rivalry The rivalry amongst Canadian air carriers is intense. WestJet is in constant battle with Air Canada to provide the lowest cost air transportation to travellers both domestically and abroad. The services offered by both airlines are quite similar. Both have on-board entertainment available for passenger enjoyment, and both have similar price points. An objective way to compare the performance of both airlines is to examine the Load Factor. Load Factor is calculated using the following method:

American Airlines' Competitors Environment Analysis Name Institutional Affiliation Date: American Airlines' Competitors Environment Analysis American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both

1. There are a few trends in the US airline industry. One is consolidation, wherein existing players merge in an attempt to lower their costs and generate operating synergies. The most recent major merger was the United Continental merger, which is still an ongoing affair, but has created the largest

Today’s aviation industry is considered to be more robust then ever before. On most days, upwards of 100,000 flights across the world depart, delivering goods and servicing for travel. Passengers worldwide are finding air travel to be fast, reliable, safe and relatively inexpensive. While flight in itself remains the same, aircraft manufacturers are constantly looking for ways to improve such factors. Unfortunately, in today’s worldwide climate, there are several items which have a direct impact on ticket pricing. These items include taxes and fees, fuel cost, and ticket sell‘s. Furthermore with the increased sophistication of aircrafts today, cost to purchase, maintain, and operate such aircraft are significantly more than years past. However,

"Global airlines have realized that ancillary revenues can make a huge difference to profit and loss, especially during difficult times” (Upadhyay, 2013, p.1). From a business point of view ancillary revenue has become a necessity for all airlines as they all struggle to fill the profit gap created by high operating costs and intense competition, in order to achieve an increase in profitability (Kuuchi, 2013). According to Robson, competitive advantage is attained by targeting to provide a more relevant and advanced product offering for the same price as the competition within the same market (Robson, 1994). However low budget airlines have turned this around and have focused on attaining competitiveness by offering lower prices than competitors, making their pricing their superior value and unique benefit, without increasing the products value itself, but simplifying it to its basic and letting the customer change the product to its personal needs and demands (E. Porter, 1985). Budget ticket offerings have long proven to be one of the most successful strategies and business models in the airline industry for companies such as easyJet, to attain not only a rise in profitability but also to increase market share and competitive edge, as more and more budget-conscious tourists are willing to give up comfort in return for lower fares (Hyonhee, 2012).

1. AIRCRAFT MISHAP TIMELINE On 28 April 1988, Aloha Airlines Flight 243, a Boeing 747 based out of Honolulu International Airport, Hawaii, began operations on what was scheduled for six inter-island flights. The First Officer checked in with Aloha Airlines Flight Operations about 5:00am followed by the Captain shortly

The domestic passenger market is a multi-level system consisting of local, regional, and national carriers. Together this broad market has approximately 100 airlines operating over 11 million flights per year. Most statistical sources include information from this overall market structure with the vast majority of the carriers listed in a group as “other.” This is because most of these approximately 100 carriers operate in local or regional capacities and have very little impact on the overall market. For this reason, I will further narrow my analysis to only include those carriers in the national market.

Alaska Air Group, Inc. (ALK) operates as a holding company, which through its businesses, Alaska Airlines, Horizon Air, and Virgin America, encompasses commercial aviation services. The company was founded in 1985 with Alaska Airlines and acquired Horizon Air and Jet America Airlines in 1986. Jet America Airlines was merged into Alaska Airlines in 1987. In December 2016, Alaska Air Group acquired Virgin America for approximately $2.6 billion. However, until 2019, Alaska Air Group will operate Virgin America and Alaska Airlines separately. Alaska Air Group is headquartered in Seattle, Washington, United States.

It is very important for every airliner to create value for their shareholders; ticket pricing is the main source that an airliner can make revenue from. Therefore, airliners should have strategies that help them to be sustainable in the industry. I think that my research is on a problem that most of the airliners are facing today. Especially domestic airliners and the airlines with limited destinations are making more losses due to improper pricing strategies. This research focusses on creating a value to the airliner that I will be working for. It also creates value to the shareholders and stakeholders of the company. As every business is based on the customer satisfaction, my research is achievable if I could make a good analysis of customers’ needs and wants.